8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 31, 2007

CAMDEN NATIONAL CORPORATION

(Exact name of Registrant as specified in charter)

MAINE	01-28190	01-0413282
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS employer Identification No.)

Two Elm Street, Camden, Maine	04843
(Address of principal executive offices)	(Zip Code)

(207) 236-8821

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 – Results of Operations and Financial Condition

On October 31, 2007, Camden National Corporation released its quarterly shareholder letter and financial summary for the third quarter of 2007.

Item 9.01 – Financial Statements and Exhibits

(d) Exhibits.

99.1 Third quarter 2007 shareholder letter and financial summary

Forward-Looking Statements

This report contains statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “will,” “should,” and other expressions which predict or indicate future events or trends and which do not relate to historical matters. Forward-looking statements should not be relied on, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of Camden National Corporation (“Camden”). These risks, uncertainties and other factors may cause the actual results, performance or achievements of Camden to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

Some of the factors that might cause these differences include the following: (i) failure of the parties to satisfy the closing conditions in the Merger Agreement in a timely manner or at all; (ii) failure of the shareholders of Union Bankshares Company (“Union Bankshares”) to approve the Merger Agreement; (iii) failure to obtain governmental approvals of the Merger, or imposition of adverse regulatory conditions in connection with such approvals; (iv) disruptions in the businesses of the parties as a result of the pendency of the Merger; (v) integration costs following the merger, (vi) changes in general, national or regional economic conditions; (vii) changes in loan default and charge-off rates; (viii) reductions in deposit levels necessitating increased borrowing to fund loans and investments; (ix) changes in interest rates; (x) changes in laws and regulations; (xi) changes in the size and nature of the Camden’s competition; and (xii) changes in the assumptions used in making such forward-looking statements. Other factors could also cause these differences. For more information about these factors please see Camden’s and Union Bankshares’ filings with the SEC, including their Annual Report on Form 10-K on file with the Securities and Exchange Commission (“SEC”). All of these factors should be carefully reviewed, and readers should not place undue reliance on these forward-looking statements. These forward-looking statements were based on information, plans and estimates at the date of this report, and the Company does not promise to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Additional Information and Where to Find It

In connection with the proposed merger of Union Bankshares with and into Camden, Camden and Union Bankshares have filed relevant materials with the SEC, including the registration statement on Form S-4 containing a proxy statement/prospectus dated October 23, 2007. INVESTORS ARE URGED TO READ THESE MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT CAMDEN, UNION BANKSHARES AND THE MERGER. The proxy statement/prospectus and other relevant materials, and any other documents filed by Camden or Union Bankshares with the SEC, may be obtained free of charge at the SEC’s website at www.sec.gov. In addition, investors may obtain free copies of the documents filed with the SEC by Camden by directing a written request to Camden National Corporation, Two Elm Street, Camden, Maine 04843, Attention: Suzanne Brightbill, and free copies of the documents filed with the SEC by Union Bankshares by directing a written request to Union Bankshares Company, 66 Main Street, Ellsworth, Maine 04605, Attention: Clerk.

Information about the directors and executive officers of Camden and Union Bankshares and information about any other persons who may be deemed participants in this transaction is included in the proxy statement/prospectus dated October 23, 2007. You can find information about Camden’s directors and executive officers in the proxy statement for Camden’s annual meeting of stockholders filed with the SEC on March 21, 2007. You can find information about Union Bankshares’s directors and executive officers in the proxy statement/prospectus dated October 23, 2007. You can obtain free copies of these documents from the SEC, Camden or Union Bankshares using the contact information above.

Contacts:

Suzanne Brightbill	Terance Fancy
Assistant Vice President, Public Relations Officer	Vice President, Compliance Officer
Camden National Corporation	Union Trust Company
207.230.2120	207.667.4537, ext 243
sbrightbill@camdennational.com	tfancy@uniontrust.com

Participants in Solicitation

Camden, Union Bankshares and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the shareholders of Union Bankshares in connection with the merger.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be filed on its behalf by the undersigned thereunto duly authorized.

CAMDEN NATIONAL CORPORATION
By:	/s/ Sean G. Daly	Date: October 31, 2007
	Sean G. Daly
	Chief Financial Officer and Principal Financial & Accounting Officer

EX-99.1

Exhibit 99.1

Dear Shareholders:

I am pleased to report to you that in the face of continued economic uncertainty and in the midst of financial markets that seemingly bring us more bad news than good news these days, your Company is performing at a highly satisfactory level and actively pursuing its strategic growth agenda.

Through the first nine months of 2007, earnings per diluted share of $2.24 represented an increase of 2.8%, compared to $2.18 for the same three quarters in 2006, reflecting the Company's common stock repurchase activity. Net income of $14.7 million for the nine-month period ended September 30, 2007 was down 4.0% from the $15.3 million reported for the nine-month period ended September 30, 2006. These results translated into a return on average equity of 18.08% and a return on average assets of 1.13% for the nine-month period ended September 30, 2007, which compared to 18.23% and 1.19%, respectively, for the same period a year ago.

For the quarter ended September 30, 2007, earnings per diluted share of $0.77 was equal to the $0.77 per diluted share earned during the third quarter of 2006. Net income for the recently completed quarter was $5.0 million, which was $138,000, or 2.7%, lower than that earned in the same quarter a year ago.

At September 30, 2007, total assets of $1.7 billion were flat compared to where the Company ended the third quarter of 2006. Total loans of $1.2 billion at September 30, 2007 declined $69.8 million, or 5.61%, year-on-year. This decline is almost exclusively centered in our commercial real estate portfolio and reflects a continued conservative posture in the Company’s loan underwriting practices given the earlier-mentioned uncertainty surrounding the economy.

Year-to-date, the quality of the Company’s loan portfolio continues to demonstrate soundness and improvement, as evidenced by the level of non-performing loans to total loans, which at 0.50% at September 30, 2007 was down from 0.68% and 1.12% at September 30, 2006 and December 31, 2006, respectively. In addition, net charge-offs to total loans for the nine-month period ended September 30, 2007 was 0.09%. The allowance for loan and lease losses, at $13.9 million, was more than double the outstanding balances of our non-performing loans at September 30, 2007, and as a percentage of total loans stands at 1.19%. Once again, by any of the aforementioned measures of performance, your Company is considered better than average among its peers.

At September 30, 2007, total core deposits (total deposits excluding brokered certificates of deposit), at $1.1 billion, were up 3.2% over balances reported at September 30, 2006. The most significant deposit category for growth was money market accounts, up $30.9 million, or 11.8%, year-on-year. These results reflect the emphasis on the business development efforts of the Company’s commercial banking and cash management teams, who are laser-focused on deposit growth in the current environment. This effort is featured in the side panels of this report.

Positive momentum continued in the area of non-interest income, which at $9.4 million for the nine months ended September 30, 2007, was up $706,000, or 8.1%, versus the same period a year ago. Primary contributors to this success continue to be fiduciary services, brokerage and insurance commissions, and debit card activities with year-on-year revenue increases of 11.5%, 59.7% and 18.2%, respectively. At the same time, the Company maintained its commitment to controlling overhead as total non-interest expenses for the first nine months of 2007 were $25.5 million, which was $190,000, or 0.7%, lower than year-to-date at September 30, 2006. This resulted in an efficiency ratio of 54.92%, up from 51.73% reported at the same time last year, yet worthy of our recognition in the industry as a ‘low-cost producer.’

Undoubtedly the most significant event of the third quarter was our announced intention to acquire Union Bankshares Company, parent company of Union Trust Company, a $565.1 million community bank headquartered in Ellsworth, Maine. Our high regard for this 120-year old company dates back many years, which ostensibly kept them on our list of desirable acquisition targets. Prominent among their appealing characteristics is the coastal nature of the branch franchise, which makes for a natural geographic extension to our existing footprint. In addition, their well-developed wealth management and financial advisory business models will provide added scale to Camden National Corporation’s existing capabilities resident within Acadia Trust, N.A. and Acadia Financial Consultants. We anticipate closing on the transaction in early 2008 at which time the combined enterprises will result in the creation of the largest community banking organization headquartered in Maine.

On the governance front, Theodore C. Johanson, a Director of the Company and its affiliate, Camden National Bank, attained the mandatory age of retirement following 11 years of loyal service. Ted was an enlightened presence in our midst, always mindful of his fiduciary duty to you, the shareholders. We shall miss his valuable insight and good humor, and we will always be grateful for his many contributions to each of the Company’s constituencies.

Finally, the Board of Directors approved a dividend of $0.24 per share, payable on October 31, 2007, to shareholders of record on October 15, 2007. This represents a $0.02, or 9.1%, increase over the dividend paid for the same period a year ago.

It goes without saying that these are fairly challenging times for our industry. The investment community appears unimpressed, even with those who, like us, continue to produce results worthy of notice. Rest assured, however, that your Company and its workforce are undaunted by the effects of that which we cannot control. Rather, we remain collectively focused on doing what comes naturally – delivering remarkable experiences, each day, every day – confident that when economic conditions improve, we will be among those ready to seize the opportunities before us.

Sincerely,

Robert W. Daigle

President & CEO

Consolidated Statements of Condition (unaudited)

	September 30,						December 31,
(In thousands, except number of shares & per share data)	2007			2006			2006
Assets
Cash and due from banks	$	35,833		$	34,069		$	33,358
Federal funds sold		30,965			2,125			—
Securities available for sale, at market value		393,193			361,257			409,926
Securities held to maturity		34,277			34,169			34,167
Loans, less allowance for loan losses of $13,925 $14,472 and $14,933 at September 30, 2007 and 2006 and December 31, 2006, respectively		1,160,386			1,229,670			1,203,196
Premises and equipment, net		19,728			16,758			17,595
Other real estate owned		110			—			125
Goodwill		3,991			3,991			3,991
Other assets		69,343			67,149			67,528
Total assets	$	1,747,826		$	1,749,188		$	1,769,886
Liabilities
Deposits:
Demand	$	160,516		$	157,816		$	146,458
NOW		131,254			126,429			125,809
Money market		293,700			262,817			261,585
Savings		89,512			95,060			96,661
Certificates of deposit		502,434			577,999			555,288
Total deposits		1,177,416			1,220,121			1,185,801
Borrowings from Federal Home Loan Bank		263,084			307,227			340,499
Other borrowed funds		140,278			67,723			60,782
Junior subordinated debentures		36,083			36,083			36,083
Due to broker		556			—			24,354
Accrued interest and other liabilities		16,300			15,308			15,315
Total liabilities		1,633,717			1,646,462			1,662,834
Shareholders' Equity
Common stock, no par value; authorized 20,000,000 shares, issued and outstanding 6,513,000, 6,615,480 and 6,616,780 shares on September 30, 2007 and 2006 and December 31, 2006, respectively		2,531			2,450			2,450
Surplus		2,538			2,278			2,584
Retained earnings		111,861			102,434			105,959
Accumulated other comprehensive loss
Net unrealized losses on securities available for sale, net of tax		(2,056	)		(4,266	)		(2,985	)
Net unrealized losses on derivative instruments marked to market, net of tax		—			(170	)		(198	)
Adjustment for unfunded post-retirement plans, net of tax		(765	)		—			(758	)
Total accumulated other comprehensive loss		(2,821	)		(4,436	)		(3,941	)
Total shareholders' equity		114,109			102,726			107,052
Total liabilities and shareholders' equity	$	1,747,826		$	1,749,188		$	1,769,886

Camden National Corporation stock is listed on the American Stock Exchange under the ticker symbol "CAC." Stock prices shown in chart are as of close of trading on the last business day of the month.

Consolidated Statements of Income (unaudited)

	Nine Months Ended September 30,				Three Months Ended September 30,
(In thousands, except number of shares & per share data)	2007		2006		2007		2006
Interest Income
Interest and fees on loans	$	64,162	$	64,795	$	21,105	$	22,441
Interest on securities		15,380		13,815		5,085		4,639
Other interest income		1,455		906		637		341
Total interest income		80,997		79,516		26,827		27,421
Interest Expense
Interest on deposits		27,849		25,708		9,197		9,405
Interest on other borrowings		14,417		11,889		4,854		4,253
Interest on junior subordinated debentures		1,781		1,037		600		600
Total interest expense		44,047		38,634		14,651		14,258
Net interest income		36,950		40,882		12,176		13,163
Provision for Loan and Lease Losses		100		1,656		—		552
Net interest income after provision for loan and lease losses		36,850		39,226		12,176		12,611
Non-interest Income
Service charges on deposit accounts		2,582		2,570		838		892
Other service charges and fees		1,380		1,271		502		416
Income from fiduciary services		3,668		3,290		1,240		1,139
Life insurance earnings		603		600		218		200
Other income		1,183		979		367		356
Total non-interest income		9,416		8,710		3,165		3,003
Non-interest Expenses
Salaries and employee benefits		13,894		13,663		4,609		4,455
Premises and fixed assets		3,730		3,466		1,235		1,120
Amortization of core deposit intangible		642		650		214		213
Other expenses		7,200		7,877		2,344		2,392
Total non-interest expenses		25,466		25,656		8,402		8,180
Income before income taxes		20,800		22,280		6,939		7,434
Income Taxes		6,077		6,948		1,941		2,298
Net Income	$	14,723	$	15,332	$	4,998	$	5,136
Per Share Data
Basic earnings per share	$	2.24	$	2.18	$	0.77	$	0.77
Diluted earnings per share		2.24		2.18		0.77		0.77
Cash dividends per share	$	0.72	$	0.66	$	0.24	$	0.22
Weighted average number of shares outstanding		6,571,836		7,021,808		6,513,000		6,613,379
Tangible book value per share(1)	$	16.83	$	14.71

(1) Computed by dividing total shareholders’ equity less goodwill and core deposit intangible by the number of common shares outstanding.

A complete set of financial statements for Camden National Corporation may be obtained upon written request to Suzanne Brightbill, Public Relations Officer, Camden National Corporation, P.O. Box 310, Camden, Maine 04843.